Will Cyber Liability Insurance Cover Loss of Business Income?

November 17, 2014 Published by Rajesh Goel

The short answer is yes, if you are properly prepared. Let’s review a case whereby a computer system was infected with the CryptoLocker or CryptoWall ( a common file-encrypting ransomware program). This type of infection has reportedly infected over 800,000 computers in the last 10 months resulting in over 6 billion ‘hostaged’ files and millions of dollars that have been paid out in order to release their encryption. Ransomware has become the most destructive threat on the Internet today and experts project the frequency of attacks to continue to increase in both frequency and sophistication. If infected, you lose all control of your data until a ransom is paid and an encryption key is provided. A recent episode of The Good Wife on CBS featured this type of attack.

Insure@tech has partnered with Brainlink’s Raj Goel who is an IT security expert. Brainlink’s data breach recovery system allows clients to unlock their files without having to pay the steep ransomed demand.
Here’s the challenge; even though you can get back control of your system, some data recovery or additional maintenance will be required. This will also mean that your business is unable to operate at times for a period of days and even weeks.

The unknown, and bad news, most businesses face is that this type of loss of ‘intangible property’ (i.e., data) is specifically excluded under a typical business policy that the majority of businesses have today. The good news is that certain insurance carriers provide coverage for loss of income resulting from data breaches or cyber attacks. Cyber policies are specific and in addition to standard business insurance.

A Cyber Liability policy must be tailored specifically to your business to ensure financial recovery. Not all Cyber Liability policies offer the same benefits and conditions can vary drastically. Do your homework or better yet, work with a Cyber Liability underwriting expert like Insure@tech. For example, a good policy should include coverage/reimbursement of the ‘ransom’ in addition to the loss of income the business incurred.

In several cases, data cannot be recovered and the process may require much more time including criminal investigation by the Feds, local police as well as legal action. All of these variables can significantly extend the business’ inability to function or make money.